diff --git a/.changeset/curvy-geckos-hug.md b/.changeset/curvy-geckos-hug.md
new file mode 100644
index 0000000000..06e450066c
--- /dev/null
+++ b/.changeset/curvy-geckos-hug.md
@@ -0,0 +1,5 @@
+---
+"create-t3-app": major
+---
+
+Adds a new option to the CLI to avoid including the source directory during project creation.
diff --git a/cli/src/cli/index.ts b/cli/src/cli/index.ts
index ce5ef6ca50..72d947fbd6 100644
--- a/cli/src/cli/index.ts
+++ b/cli/src/cli/index.ts
@@ -20,6 +20,7 @@ interface CliFlags {
   noInstall: boolean;
   default: boolean;
   importAlias: string;
+  srcDirectory: boolean;
 
   /** @internal Used in CI. */
   CI: boolean;
@@ -52,6 +53,7 @@ const defaultOptions: CliResults = {
   flags: {
     noGit: false,
     noInstall: false,
+    srcDirectory: false,
     default: false,
     CI: false,
     tailwind: false,
@@ -86,6 +88,11 @@ export const runCli = async (): Promise<CliResults> => {
       "Explicitly tell the CLI to not run the package manager's install command",
       false
     )
+    .option(
+      "--srcDirectory",
+      "Explicitly tell the CLI to create a 'src' directory in the project",
+      false
+    )
     .option(
       "-y, --default",
       "Bypass the CLI and use all default options to bootstrap a new t3-app",
@@ -253,6 +260,11 @@ export const runCli = async (): Promise<CliResults> => {
             message: "Will you be using Tailwind CSS for styling?",
           });
         },
+        srcDirectory: () => {
+          return p.confirm({
+            message: "Would you like to use 'src' directory?",
+          });
+        },
         trpc: () => {
           return p.confirm({
             message: "Would you like to use tRPC?",
@@ -350,6 +362,7 @@ export const runCli = async (): Promise<CliResults> => {
       flags: {
         ...cliResults.flags,
         appRouter: project.appRouter ?? cliResults.flags.appRouter,
+        srcDirectory: project.srcDirectory ?? cliResults.flags.srcDirectory,
         noGit: !project.git || cliResults.flags.noGit,
         noInstall: !project.install || cliResults.flags.noInstall,
         importAlias: project.importAlias ?? cliResults.flags.importAlias,
diff --git a/cli/src/helpers/createProject.ts b/cli/src/helpers/createProject.ts
index 81b385485f..10aba7980a 100644
--- a/cli/src/helpers/createProject.ts
+++ b/cli/src/helpers/createProject.ts
@@ -19,6 +19,7 @@ import { getUserPkgManager } from "~/utils/getUserPkgManager.js";
 interface CreateProjectOptions {
   projectName: string;
   packages: PkgInstallerMap;
+  srcDirectory: boolean;
   scopedAppName: string;
   noInstall: boolean;
   importAlias: string;
@@ -28,6 +29,7 @@ interface CreateProjectOptions {
 
 export const createProject = async ({
   projectName,
+  srcDirectory,
   scopedAppName,
   packages,
   noInstall,
@@ -42,6 +44,7 @@ export const createProject = async ({
     projectName,
     projectDir,
     pkgManager,
+    srcDirectory,
     scopedAppName,
     noInstall,
     appRouter,
@@ -52,6 +55,7 @@ export const createProject = async ({
   installPackages({
     projectName,
     scopedAppName,
+    srcDirectory,
     projectDir,
     pkgManager,
     packages,
@@ -68,11 +72,11 @@ export const createProject = async ({
       path.join(projectDir, "next.config.js")
     );
 
-    selectLayoutFile({ projectDir, packages });
-    selectPageFile({ projectDir, packages });
+    selectLayoutFile({ projectDir, packages, srcDirectory });
+    selectPageFile({ projectDir, packages, srcDirectory });
   } else {
-    selectAppFile({ projectDir, packages });
-    selectIndexFile({ projectDir, packages });
+    selectAppFile({ projectDir, packages, srcDirectory });
+    selectIndexFile({ projectDir, packages, srcDirectory });
   }
 
   // If no tailwind, select use css modules
@@ -83,12 +87,27 @@ export const createProject = async ({
     );
     const indexModuleCssDest = path.join(
       projectDir,
-      "src",
+      srcDirectory ? "src" : "",
       appRouter ? "app" : "pages",
       "index.module.css"
     );
     fs.copyFileSync(indexModuleCss, indexModuleCssDest);
   }
 
+  if (!srcDirectory) {
+    const tsconfigFile = path.join(projectDir, "tsconfig.json");
+    const nextconfigFile = path.join(projectDir, "next.config.js");
+    fs.writeFileSync(
+      tsconfigFile,
+      fs.readFileSync(tsconfigFile, "utf8").replace("./src/*", "./*")
+    );
+    fs.writeFileSync(
+      nextconfigFile,
+      fs
+        .readFileSync(nextconfigFile, "utf8")
+        .replace("./src/env.js", "./env.js")
+    );
+  }
+
   return projectDir;
 };
diff --git a/cli/src/helpers/scaffoldProject.ts b/cli/src/helpers/scaffoldProject.ts
index d4e6730798..715b99a64a 100644
--- a/cli/src/helpers/scaffoldProject.ts
+++ b/cli/src/helpers/scaffoldProject.ts
@@ -12,6 +12,7 @@ import { logger } from "~/utils/logger.js";
 export const scaffoldProject = async ({
   projectName,
   projectDir,
+  srcDirectory,
   pkgManager,
   noInstall,
 }: InstallerOptions) => {
@@ -90,6 +91,21 @@ export const scaffoldProject = async ({
     path.join(projectDir, ".gitignore")
   );
 
+  if (!srcDirectory) {
+    await Promise.all([
+      fs.rename(
+        path.join(projectDir, "src", "env.js"),
+        projectDir + "/" + "env.js"
+      ),
+      fs.rename(
+        path.join(projectDir, "src", "styles"),
+        projectDir + "/" + "styles"
+      ),
+    ]);
+
+    await fs.rm(path.join(projectDir, "src"), { recursive: true });
+  }
+
   const scaffoldedName =
     projectName === "." ? "App" : chalk.cyan.bold(projectName);
 
diff --git a/cli/src/helpers/selectBoilerplate.ts b/cli/src/helpers/selectBoilerplate.ts
index 2b07079be6..3e0c6dbf6c 100644
--- a/cli/src/helpers/selectBoilerplate.ts
+++ b/cli/src/helpers/selectBoilerplate.ts
@@ -5,11 +5,12 @@ import { PKG_ROOT } from "~/consts.js";
 import { type InstallerOptions } from "~/installers/index.js";
 
 type SelectBoilerplateProps = Required<
-  Pick<InstallerOptions, "packages" | "projectDir">
+  Pick<InstallerOptions, "packages" | "projectDir" | "srcDirectory">
 >;
 // This generates the _app.tsx file that is used to render the app
 export const selectAppFile = ({
   projectDir,
+  srcDirectory,
   packages,
 }: SelectBoilerplateProps) => {
   const appFileDir = path.join(PKG_ROOT, "template/extras/src/pages/_app");
@@ -36,13 +37,18 @@ export const selectAppFile = ({
   }
 
   const appSrc = path.join(appFileDir, appFile);
-  const appDest = path.join(projectDir, "src/pages/_app.tsx");
+
+  const appDest = path.join(
+    projectDir,
+    srcDirectory ? "src/pages/_app.tsx" : "pages/_app"
+  );
   fs.copySync(appSrc, appDest);
 };
 
 // Similar to _app, but for app router
 export const selectLayoutFile = ({
   projectDir,
+  srcDirectory,
   packages,
 }: SelectBoilerplateProps) => {
   const layoutFileDir = path.join(PKG_ROOT, "template/extras/src/app/layout");
@@ -59,13 +65,19 @@ export const selectLayoutFile = ({
   }
 
   const appSrc = path.join(layoutFileDir, layoutFile);
-  const appDest = path.join(projectDir, "src/app/layout.tsx");
+
+  const appDest = path.join(
+    projectDir,
+    srcDirectory ? "src/app/layout.tsx" : "app/layout.tsx"
+  );
+
   fs.copySync(appSrc, appDest);
 };
 
 // This selects the proper index.tsx to be used that showcases the chosen tech
 export const selectIndexFile = ({
   projectDir,
+  srcDirectory,
   packages,
 }: SelectBoilerplateProps) => {
   const indexFileDir = path.join(PKG_ROOT, "template/extras/src/pages/index");
@@ -88,13 +100,17 @@ export const selectIndexFile = ({
   }
 
   const indexSrc = path.join(indexFileDir, indexFile);
-  const indexDest = path.join(projectDir, "src/pages/index.tsx");
+  const indexDest = path.join(
+    projectDir,
+    srcDirectory ? "src/pages/index.tsx" : "pages/index"
+  );
   fs.copySync(indexSrc, indexDest);
 };
 
 // Similar to index, but for app router
 export const selectPageFile = ({
   projectDir,
+  srcDirectory,
   packages,
 }: SelectBoilerplateProps) => {
   const indexFileDir = path.join(PKG_ROOT, "template/extras/src/app/page");
@@ -117,6 +133,10 @@ export const selectPageFile = ({
   }
 
   const indexSrc = path.join(indexFileDir, indexFile);
-  const indexDest = path.join(projectDir, "src/app/page.tsx");
+
+  const indexDest = path.join(
+    projectDir,
+    srcDirectory ? "src/app/page.tsx" : "app/page.tsx"
+  );
   fs.copySync(indexSrc, indexDest);
 };
diff --git a/cli/src/index.ts b/cli/src/index.ts
index 228192ef3a..254df5f978 100644
--- a/cli/src/index.ts
+++ b/cli/src/index.ts
@@ -36,7 +36,7 @@ const main = async () => {
   const {
     appName,
     packages,
-    flags: { noGit, noInstall, importAlias, appRouter },
+    flags: { noGit, noInstall, importAlias, appRouter, srcDirectory },
     databaseProvider,
   } = await runCli();
 
@@ -48,6 +48,7 @@ const main = async () => {
   const projectDir = await createProject({
     projectName: appDir,
     scopedAppName,
+    srcDirectory,
     packages: usePackages,
     databaseProvider,
     importAlias,
diff --git a/cli/src/installers/drizzle.ts b/cli/src/installers/drizzle.ts
index d9c5930b98..0497bb5b10 100644
--- a/cli/src/installers/drizzle.ts
+++ b/cli/src/installers/drizzle.ts
@@ -10,6 +10,7 @@ import { type AvailableDependencies } from "./dependencyVersionMap.js";
 export const drizzleInstaller: Installer = ({
   projectDir,
   packages,
+  srcDirectory,
   scopedAppName,
   databaseProvider,
 }) => {
@@ -56,7 +57,10 @@ export const drizzleInstaller: Installer = ({
       ? `with-auth-${databaseProvider}.ts`
       : `base-${databaseProvider}.ts`
   );
-  const schemaDest = path.join(projectDir, "src/server/db/schema.ts");
+  const schemaDest = path.join(
+    projectDir,
+    srcDirectory ? "src/server/db/schema.ts" : "server/db/schema.ts"
+  );
 
   // Replace placeholder table prefix with project name
   let schemaContent = fs.readFileSync(schemaSrc, "utf-8");
@@ -73,7 +77,10 @@ export const drizzleInstaller: Installer = ({
     extrasDir,
     `src/server/db/index-drizzle/with-${databaseProvider}.ts`
   );
-  const clientDest = path.join(projectDir, "src/server/db/index.ts");
+  const clientDest = path.join(
+    projectDir,
+    srcDirectory ? "src/server/db/index.ts" : "server/db/index.ts"
+  );
 
   // add db:* scripts to package.json
   const packageJsonPath = path.join(projectDir, "package.json");
@@ -95,4 +102,14 @@ export const drizzleInstaller: Installer = ({
   fs.writeJSONSync(packageJsonPath, packageJsonContent, {
     spaces: 2,
   });
+
+  if (!srcDirectory) {
+    const drizzleConfigFile = path.join(projectDir, "drizzle.config.ts");
+    fs.writeFileSync(
+      drizzleConfigFile,
+      fs
+        .readFileSync(drizzleConfigFile, "utf8")
+        .replace("./src/server/db/schema.ts", "./server/db/schema.ts")
+    );
+  }
 };
diff --git a/cli/src/installers/envVars.ts b/cli/src/installers/envVars.ts
index 6924f6403f..14c120054c 100644
--- a/cli/src/installers/envVars.ts
+++ b/cli/src/installers/envVars.ts
@@ -7,6 +7,7 @@ import { type DatabaseProvider, type Installer } from "~/installers/index.js";
 export const envVariablesInstaller: Installer = ({
   projectDir,
   packages,
+  srcDirectory,
   databaseProvider,
   projectName,
 }) => {
@@ -44,7 +45,10 @@ export const envVariablesInstaller: Installer = ({
       "template/extras/src/env",
       envFile
     );
-    const envSchemaDest = path.join(projectDir, "src/env.js");
+    const envSchemaDest = path.join(
+      projectDir,
+      srcDirectory ? "src/env.js" : "env.js"
+    );
     fs.copyFileSync(envSchemaSrc, envSchemaDest);
   }
 
diff --git a/cli/src/installers/index.ts b/cli/src/installers/index.ts
index 776a16ba1c..348c10c680 100644
--- a/cli/src/installers/index.ts
+++ b/cli/src/installers/index.ts
@@ -34,6 +34,7 @@ export interface InstallerOptions {
   projectDir: string;
   pkgManager: PackageManager;
   noInstall: boolean;
+  srcDirectory: boolean;
   packages?: PkgInstallerMap;
   appRouter?: boolean;
   projectName: string;
diff --git a/cli/src/installers/nextAuth.ts b/cli/src/installers/nextAuth.ts
index 0886e90d7e..82fc640683 100644
--- a/cli/src/installers/nextAuth.ts
+++ b/cli/src/installers/nextAuth.ts
@@ -9,6 +9,7 @@ import { addPackageDependency } from "~/utils/addPackageDependency.js";
 export const nextAuthInstaller: Installer = ({
   projectDir,
   packages,
+  srcDirectory,
   appRouter,
 }) => {
   const usingPrisma = packages?.prisma.inUse;
@@ -26,12 +27,16 @@ export const nextAuthInstaller: Installer = ({
 
   const extrasDir = path.join(PKG_ROOT, "template/extras");
 
-  const apiHandlerFile = "src/pages/api/auth/[...nextauth].ts";
-  const routeHandlerFile = "src/app/api/auth/[...nextauth]/route.ts";
+  const apiHandlerFile = "pages/api/auth/[...nextauth].ts";
+  const routeHandlerFile = "app/api/auth/[...nextauth]/route.ts";
   const srcToUse = appRouter ? routeHandlerFile : apiHandlerFile;
 
-  const apiHandlerSrc = path.join(extrasDir, srcToUse);
-  const apiHandlerDest = path.join(projectDir, srcToUse);
+  const apiHandlerSrc = path.join(extrasDir, "src", srcToUse);
+  const apiHandlerDest = path.join(
+    projectDir,
+    srcDirectory ? "src" : "",
+    srcToUse
+  );
 
   const authConfigSrc = path.join(
     extrasDir,
@@ -43,7 +48,10 @@ export const nextAuthInstaller: Installer = ({
         ? "with-drizzle.ts"
         : "base.ts"
   );
-  const authConfigDest = path.join(projectDir, "src/server/auth.ts");
+  const authConfigDest = path.join(
+    projectDir,
+    srcDirectory ? "src/server/auth.ts" : "server/auth.ts"
+  );
 
   fs.copySync(apiHandlerSrc, apiHandlerDest);
   fs.copySync(authConfigSrc, authConfigDest);
diff --git a/cli/src/installers/prisma.ts b/cli/src/installers/prisma.ts
index f92da12395..158230d155 100644
--- a/cli/src/installers/prisma.ts
+++ b/cli/src/installers/prisma.ts
@@ -8,6 +8,7 @@ import { addPackageDependency } from "~/utils/addPackageDependency.js";
 
 export const prismaInstaller: Installer = ({
   projectDir,
+  srcDirectory,
   packages,
   databaseProvider,
 }) => {
@@ -63,7 +64,10 @@ export const prismaInstaller: Installer = ({
       ? "src/server/db/db-prisma-planetscale.ts"
       : "src/server/db/db-prisma.ts"
   );
-  const clientDest = path.join(projectDir, "src/server/db.ts");
+  const clientDest = path.join(
+    projectDir,
+    srcDirectory ? "src/server/db.ts" : "server/db.ts"
+  );
 
   // add postinstall and push script to package.json
   const packageJsonPath = path.join(projectDir, "package.json");
diff --git a/cli/src/installers/tailwind.ts b/cli/src/installers/tailwind.ts
index e692392823..27c9b2dc95 100644
--- a/cli/src/installers/tailwind.ts
+++ b/cli/src/installers/tailwind.ts
@@ -5,7 +5,7 @@ import { PKG_ROOT } from "~/consts.js";
 import { type Installer } from "~/installers/index.js";
 import { addPackageDependency } from "~/utils/addPackageDependency.js";
 
-export const tailwindInstaller: Installer = ({ projectDir }) => {
+export const tailwindInstaller: Installer = ({ projectDir, srcDirectory }) => {
   addPackageDependency({
     projectDir,
     dependencies: [
@@ -17,6 +17,10 @@ export const tailwindInstaller: Installer = ({ projectDir }) => {
     devMode: true,
   });
 
+  const cssDestPath = srcDirectory
+    ? "src/styles/globals.css"
+    : "styles/globals.css";
+
   const extrasDir = path.join(PKG_ROOT, "template/extras");
 
   const twCfgSrc = path.join(extrasDir, "config/tailwind.config.ts");
@@ -29,10 +33,20 @@ export const tailwindInstaller: Installer = ({ projectDir }) => {
   const prettierDest = path.join(projectDir, "prettier.config.js");
 
   const cssSrc = path.join(extrasDir, "src/styles/globals.css");
-  const cssDest = path.join(projectDir, "src/styles/globals.css");
+  const cssDest = path.join(projectDir, cssDestPath);
 
   fs.copySync(twCfgSrc, twCfgDest);
   fs.copySync(postcssCfgSrc, postcssCfgDest);
   fs.copySync(cssSrc, cssDest);
   fs.copySync(prettierSrc, prettierDest);
+
+  if (!srcDirectory) {
+    const tailwindConfigFile = path.join(projectDir, "tailwind.config.ts");
+    fs.writeFileSync(
+      tailwindConfigFile,
+      fs
+        .readFileSync(tailwindConfigFile, "utf8")
+        .replace("./src/**/*.tsx", "./**/*.tsx")
+    );
+  }
 };
diff --git a/cli/src/installers/trpc.ts b/cli/src/installers/trpc.ts
index 96fd354331..9d59dd498c 100644
--- a/cli/src/installers/trpc.ts
+++ b/cli/src/installers/trpc.ts
@@ -8,6 +8,7 @@ import { addPackageDependency } from "~/utils/addPackageDependency.js";
 export const trpcInstaller: Installer = ({
   projectDir,
   packages,
+  srcDirectory,
   appRouter,
 }) => {
   addPackageDependency({
@@ -29,12 +30,17 @@ export const trpcInstaller: Installer = ({
 
   const extrasDir = path.join(PKG_ROOT, "template/extras");
 
-  const apiHandlerFile = "src/pages/api/trpc/[trpc].ts";
-  const routeHandlerFile = "src/app/api/trpc/[trpc]/route.ts";
+  const apiHandlerFile = "pages/api/trpc/[trpc].ts";
+  const routeHandlerFile = "app/api/trpc/[trpc]/route.ts";
+
   const srcToUse = appRouter ? routeHandlerFile : apiHandlerFile;
 
-  const apiHandlerSrc = path.join(extrasDir, srcToUse);
-  const apiHandlerDest = path.join(projectDir, srcToUse);
+  const apiHandlerSrc = path.join(extrasDir, "src", srcToUse);
+  const apiHandlerDest = path.join(
+    projectDir,
+    srcDirectory ? "src" : "",
+    srcToUse
+  );
 
   const trpcFile =
     usingAuth && usingDb
@@ -50,10 +56,16 @@ export const trpcInstaller: Installer = ({
     appRouter ? "trpc-app" : "trpc-pages",
     trpcFile
   );
-  const trpcDest = path.join(projectDir, "src/server/api/trpc.ts");
+  const trpcDest = path.join(
+    projectDir,
+    srcDirectory ? "src/server/api/trpc.ts" : "server/api/trpc.ts"
+  );
 
   const rootRouterSrc = path.join(extrasDir, "src/server/api/root.ts");
-  const rootRouterDest = path.join(projectDir, "src/server/api/root.ts");
+  const rootRouterDest = path.join(
+    projectDir,
+    srcDirectory ? "src/server/api/root.ts" : "server/api/root.ts"
+  );
 
   const exampleRouterFile =
     usingAuth && usingPrisma
@@ -75,7 +87,9 @@ export const trpcInstaller: Installer = ({
   );
   const exampleRouterDest = path.join(
     projectDir,
-    "src/server/api/routers/post.ts"
+    srcDirectory
+      ? "src/server/api/routers/post.ts"
+      : "server/api/routers/post.ts"
   );
 
   const copySrcDest: [string, string][] = [
@@ -96,11 +110,17 @@ export const trpcInstaller: Installer = ({
     copySrcDest.push(
       [
         path.join(trpcDir, "server.ts"),
-        path.join(projectDir, "src/trpc/server.ts"),
+        path.join(
+          projectDir,
+          srcDirectory ? "src/trpc/server.ts" : "trpc/server.ts"
+        ),
       ],
       [
         path.join(trpcDir, "react.tsx"),
-        path.join(projectDir, "src/trpc/react.tsx"),
+        path.join(
+          projectDir,
+          srcDirectory ? "src/trpc/react.tsx" : "trpc/react.tsx"
+        ),
       ],
       [
         path.join(
@@ -108,11 +128,19 @@ export const trpcInstaller: Installer = ({
           "src/app/_components",
           packages?.tailwind.inUse ? "post-tw.tsx" : "post.tsx"
         ),
-        path.join(projectDir, "src/app/_components/post.tsx"),
+        path.join(
+          projectDir,
+          srcDirectory
+            ? "src/app/_components/post.tsx"
+            : "app/_components/post.tsx"
+        ),
       ],
       [
         path.join(extrasDir, "src/trpc/query-client.ts"),
-        path.join(projectDir, "src/trpc/query-client.ts"),
+        path.join(
+          projectDir,
+          srcDirectory ? "src/trpc/query-client.ts" : "trpc/query-client.ts"
+        ),
       ]
     );
   } else {
@@ -123,7 +151,10 @@ export const trpcInstaller: Installer = ({
     });
 
     const utilsSrc = path.join(extrasDir, "src/utils/api.ts");
-    const utilsDest = path.join(projectDir, "src/utils/api.ts");
+    const utilsDest = path.join(
+      projectDir,
+      srcDirectory ? "src/utils/api.ts" : "utils/api.ts"
+    );
     copySrcDest.push([utilsSrc, utilsDest]);
   }